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Often, the investor or investee will adopt a restructuring plan to achieve certain synergies from the acquisition. Certain restructuring costs are required for implementation of
Often, the investor or investee will adopt a restructuring plan to achieve certain synergies from the acquisition. Certain restructuring costs are required for implementation of such a plan. Which of the following statements correctly describes the GAAP treatment of such costs?
Select one:
A
Costs that the investor is not legally obligated to incur may be accrued at the acquisition date or expensed as incurred.
B
If a restructuring plan is not already in place, the liability and related expense must be recognized subsequent to the acquisition.
C
A liability for restructuring costs expected to be incurred is included in the purchase price allocation at date of acquisition.
D
Recognizing a restructuring obligation at date of acquisition results in early recognition of expense.
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